The record arrivals of tourists in Bahrain is also offering an unexpected boost to the gold and jewellery sector, it has emerged. Sources say a large number of tourists are taking an interest to shop for gold and jewellery items owing to the VAT refund, which is giving them additional purchasing power compared to citizens and expatriates. Apart from tourists, the refund option is also available to non-residents as well as citizens residing abroad.
Speaking to The Daily Tribune, a senior manager with one of the leading jewellery houses in Bahrain, said, of late, many tourists, especially from South Asian and Arab countries, seem to be taking extra interest in buying gold and jewellery. “The VAT refund scheme is definitely an attraction and a support to the sector,” he added. Two months ago, The Daily Tribune reported a decline in the gold and jewellery sales, owing to an increase in VAT from five per cent to 10pc since the beginning of the New Year. Gold retailers then expressed hope that the sales would catch up in the next few months as consumer spending was expected to increase in the post-pandemic economic recovery period.
Those tourists who seek a VAT refund must present a copy of their passports before the jewellery sales team for verification. This verified copy along with the original bill should be presented before the VAT refund desk at the Bahrain International Airport. The VAT refund desk functions as part of the collaboration between the Bahrain Airport Company and the international payment speciality Planet Payment. “A Bahrain-based bank account number should be provided at the VAT refund desk to enable the transfer of funds, which would take a maximum of ten days.
If a tourist doesn’t have a Bahrain-based bank account, he/she can give the account number of the person who holds it. “The VAT refund will not be processed if the tourist is unable to provide a Bahrain-based bank account. And this is something the authorities should look into,” the source pointed out. The Domestic and Foreign Trade Department within the Industries and Commerce Ministry hallmarked over 9.9 tonnes of gold jewellery last year, which is one of the highest on record.
Last year witnessed a sharp increase in the quantity of precious jewellery received for analysing, as well as hallmarking at the Testing and Metrology services. The quantity of gold hallmarked last year saw an increase of 60 per cent when compared to 2020. The ministry fulfilled more than 38,000 service requests last year while the total number of jewellery tested exceeded a whopping one million and 350,000 pieces. In 2021, the ministry also carried out 3,400 inspection visits to jewellery stores to ensure compliance with the requirements of pearls and precious metals in Bahrain, which is a 38pc increase from a year ago.
Gold prices have been dropping currently following a sharp rally in the US Dollar. Making the safe-haven metal less appealing for overseas buyers, the dollar hit its highest in about two decades and firmed its position as the preferred refuge for investors worried about a potential recession. The price of 22-karat gold yesterday in the Bahrain market was BD20.6 per gram.
